2013 (Old Course)
Management Accounting
Speciality
Full Marks: 70
Pass Marks: 28
Time: 3 Hours
1. (a) “Management Accounting is
concerned with accounting information that is useful to management”. Explain
the statement. 14
Or
(b) Discuss the limitations of
Financial accounting and point out how far Management Accounting helps in overcoming
such limitations. 6+8=14
2. (a) Enumerate the
significance of break-even point, margin of safety, contribution and
profit-volume ratio in managerial decision-making. 3.5x4=14
Or
(b) The following data are
available from the records of a company:
Sales Rs.60, 000
Variable cost Rs.30, 000
Fixed Cost Rs.15, 000
You are required to calculate:
(i) P/V ratio,
break-even point and margin of safety at this level;
(ii) the effect
on BEP at 10% increase in selling price;
(iii) the
effect on margin of safety at 10% decrease in selling price (2x3) +4+4=14
3. (a) From the following
budgeted data, forecast the cash position at the end of April, May and June,
2012: 14
Month
|
Sales
|
Purchases
|
Wages
|
Miscellaneous
Expenses
|
February
March
April
May
June
|
120000
130000
80000
116000
88000
|
84000
100000
104000
106000
80000
|
10000
12000
8000
10000
8000
|
7000
8000
6000
12000
6000
|
Additional Information:
(i) Sales: 20% realised in the
month of sales, discount allowed 2%. Balance realised equally in two subsequent
months.
(ii) Purchases: These are paid
in the month following the month of supply.
(iii) Wages: 25% paid in arrear
following month.
(iv) Miscellaneous expenses:
Remain outstanding for one month.
(v) Rent: Rs.1000 per month paid
quarterly in advance due in January, April, July and October every year.
(vi) Income tax: First
instalment of advance tax Rs.25000 due on or before 15th June.
(vii) Income from investments:
Rs. 5000 received quarterly in April, July etc.
(viii) Cash in hand: Rs.5000 on
1st April, 2012.
Or
(b) What do you mean by budget
and budgetary control? State the objectives and limitations of budgetary
control. 4+5+5=14
4. (a) The following schedule
shows the Balance Sheet of Life Line Ltd. at the end of the year 2011:
Liabilities
& Capital
|
01.01.11
|
31.12.11
|
Assets
|
01.01.11
|
31.12.11
|
Share
Capital
8%
Debenture
Sundry
Creditors
Outstanding
Expenses
Depreciation
Fund
Reserve for
Contingency
Profit and
Loss A/c
|
115000
45000
51500
6500
20000
30000
8000
|
115000
35000
48000
6000
22000
30000
11500
|
Cash and
Bank Balance
Book Debt
Temporary
Investment
Prepaid
Expenses
Inventory
Land and
Building
Machinery
|
45000
33500
55000
500
41000
75000
26000
|
45000
21500
37000
1000
52000
76000
35000
|
|
276000
|
267500
|
|
276000
|
267500
|
Additional Information:
(i) 10% Dividend was paid in
cash.
(ii) New Machinery was purchased
but old machinery costing Rs.6000 was sold for Rs.2000, accumulated
depreciation was Rs.3000.
(iii) Rs.10000 8% debenture was
redeemed by purchase from open market @96 for a debenture of Rs.100.
(iv) Rs.18000 investment was
sold at book value.
You are required to prepare Cash
Flow Statement of Life Line Ltd. 14
Or
(b) Define the term “Fund flow”.
What are the purposes of preparing Fund flow statement? Write four limitations
of Fund Flow Statement. 2+8+4=14
5. (a) What is Standard Costing?
How does it help in keeping a control over cost? Point out its limitations. 4+5+5=14
Or
(b) The budget and actual sales
for a period in respect of two products are given below:
Product
|
Budgeted
Quantity
|
Price
|
Actual
Quantity
|
Rate
|
A
B
|
1000
2000
|
20
15
|
1300
2300
|
21
14
|
|
3000
|
|
3600
|
|
Calculate:
(i) Sales value variance
(ii) Sales Volume variance
(iii) Sales price variance
(iv) Sales mix variance 3+3+3+5=14
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